June 2010 Indicant Weekly Stock Market Reports

Jun 27, 2010 Indicant Weekly Stock Market Report

Volume 06, Issue 04 ISSN 1526 6516 © The Indicant Stock Market Report

Specificity

It is rare for politicians to pontificate specifics. On the rare occasion when they do, it is usually dishonest.

The latest major theme was “hope and change.” The masses applauded those words. Some even had tears of joy in their eyes when doing so. “Hope and change” is not specific. Those words are as meaningless as FDR’s “the only thing to fear is fear itself.”

One has to wonder what swirls in the three-pound brains that find such meaningless commentary so arousing. After all such verbiage is meaningless, but many people applaud those words and jump up and down with glee.

Many “hope” the stock market bear will “change” to bull. Now, that is hope and change, but again meaningless. Those who write uncovered put options during bearish cycles have more to fear than fear itself. Specifically, they are also worrying about losing their shirt and even more.

The incumbent’s political theme remains the same. They regularly orate, “…the economy would have been much worse, if we had not done what we did.” There is no specificity-just mystical rhetoric, which is more common than not from the politicians’ mouths. No one in the media has enough sense to ask those politicians, “what will the economy be five years from now, since you know so much about what did not happen in the past?” Better yet, one could ask them “where the S&P500 Index will be next Wednesday-give me a number?” Rest assured, the typical politician would end such an interview, as specificity is not desirous dialog.

Every now and then, an elected official drops their guard and offers specific commentary. Specificity can be a killer to any politician’s career. Specificity offers the listener an opportunity to design a metric describing the accuracy or inaccuracy of any specific statement. Politicians do not like this possibility and thus tend to avoid it.

Last week an elected official in Milwaukee, Peggy West, orated that Arizona and Mexico do not share a common border. Her stupidity is not surprising. What is surprising is that she was elected. That means a majority of people voted for her.

To the trained ear, most political commentary regarding the economy is no different that Peggy West’s proclamation that Arizona and Mexico do not share a border. When politicians speak of the economy, the trained ear hears the same magnitude of ignorance, as conveyed by Peggy West.

Any smart majority can inoculate a stupid minority. However, when the majority is stupid, the stock market bear will be aroused. Peggy West and those like her, and they are plentiful, represent a majority. That is bearish!

Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds – Mid-term Indicant

Click this sentence for a graphical summary of what follows. Simply scroll down the page to see graphical and detail content of this section.

The Mid-term Indicant generated no buy signal and two sell signals.

The Mid-term Indicant is signaling hold for 189 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 33.6%. That annualizes to 32.9%. The Mid-term Indicant has been signaling hold for these 189-stocks and funds for an average of 53.0-weeks.

The Mid-term Indicant is avoiding 125-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 31.7% since the Mid-term Indicant signaled sell an average of 74.3-weeks ago.

One year ago, on Jun 26, 2009, the Mid-term Indicant was holding only 22-stocks and funds out of 332 tracked for an average of 102.4-weeks. They were up by an average of 124.2% (annualized at 63.0%). There were 310-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 26.7% since their respective sell signals an average of 53.2-weeks earlier one year ago. Several stocks were identified as NLT, no longer traded, at this time one year ago. They will be replaced with new securities before the end of this year.

The Mid-term Indicant was signaling hold for 104-stocks and funds of the 345-tracked two years ago on Jun 27, 2008. They were up by an average of 254.5% (annualized at 74.7%) since their respective buy signals an average of 177.1-weeks earlier. The Mid-term Indicant was avoiding 185-stocks and funds at that time. They were down an average of 17.9% since their respective sell signals an average of 24.1-weeks earlier. There were 56-sell signals on this weekend in 2008. That is the reason for the tremendous shift in performance on the hold signals. This was the first weekend with a huge number of sell signals ahead of the great bear market later in 2008.

There were 314-stocks and funds with hold signals on Jun 22, 2007 since their buy signals an average of 106.4-weeks earlier. They were up by an average of 127.9% (annualized at 62.5%). There were 31-avoided stocks and funds at that time. They were down by an average of 14.7% from their respective sell signals an average of 28.8-weeks earlier.

On Jun 23, 2006, the Mid-term Indicant was signaling hold for 207-stocks and funds out of 345-tracked. They were up by an average of 143.6% (annualized at 66.5%) since their buy signals an average of 112.4-weeks earlier. The Mid-term Indicant was avoiding 132-stocks and funds at that time. They were down by an average of 6.4% since their sell signals an average of 14.4-weeks earlier.

Five years ago, on Jun 24, 2005, there were 196-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 106.1% (annualized at 57.9%) since their respective buy signals an average of 95.3-weeks earlier. There were 110-avoided stocks and funds then. They were down an average of 26.6% since their respective sell signals an average of 61.0-weeks earlier.

On Jun 25, 2004, there were 248-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 73.9%, annualizing at 72.5%, since their respective buy signals an average of 53.0-weeks earlier. There were 35-avoided stocks and funds then. They were down by an average of 30.4% since their sell signals an average of 44.9-weeks earlier. There were 10-buys and three sells at that time.

There were 277-stocks and funds with hold signals on Jun 27, 2003. They were up by an average of 42.6%, annualizing at 99.7%, since their buy signals 22.2-weeks earlier. The two avoided stocks and funds were down an average of 26.9% since their respective sell signals an average of 27.6-weeks earlier.

On June 28, 2002, there were 71-stocks and funds with a hold signal, enjoying a 39.9% gain since their respective buy signals an average of 40.4-weeks earlier. That annualized at 51.3%. There were 213-avoided stocks at that time. They were down 17.6% since their sell signals an average of 10.0-weeks earlier.

Summary of Stocks and Funds with Buy and Sell Signals This past Week

To maintain appropriate security, you can see the Mid-term Indicant "buy/sell" signals for stocks and funds for this week by clicking the following link. It is in the member’s only section.

Click this link to this week’s buy and sell signals.

As repeatedly stated, do not hold more than 10% of your investment resources in a single stock and do not hold more than 20% of your investment resources into a single mutual fund. Also, never fall in love with a stock or fund. Only love the value of your portfolio. Never love its contents. Management stupidity can wreak havoc on any stock or fund at any time. Socio-economic interference can devastate your holdings from time to time. Governmental and political behavior can have immediate and long-lasting unfavorable influences on the capital markets.

Some companies will perform well, regardless of the depth of the bear market. Buy signals will be muted if Congressional action threatens the capital markets. Legislation, regulation, and politicians are the biggest threat to the stock market bull.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Summary.htm

Comments about Mid-term Indicant Buy and Sell Signals This Weekend

The Long-term and Mid-term attributes have not yet succumbed to the stock market bear’s ambition, but with an increasing probability to do so.

The Dow Utilities shifted in favor of the bear on a Mid-term basis in early Feb 2010. The S&P100 Index received a Mid-term Bear signal on Jun 4, 2010. Since then, the bear has encountered some resistance, but gaining momentum.

The expected bullish spurt occurred and in doing so, muted several sell signals. The May 2009 bull leg was a short to mid-term thoroughbred and its ghost lingers. That lingering effect will continue to dampen sell signal activity. If the impending bear becomes a thoroughbred, sell signals will accelerate.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.htm

Stop Loss Management

The Mid-term Indicant recommends a trailing stop loss of 8%. For your longer-term holdings where you are enjoying triple and quadruple digit gains, you may want to set your stop at the bearish yellow price.

Floor traders are aware of stop loss positions. If prices near those stop losses against the grain of directional bias, the floor traders will drive the price down to those stop losses and then buy for themselves and then quickly sell for profits at your expense. Although seemingly immoral, it is the nature of free markets and contributes to the desired liquidity of stock markets. This is one reason why stop losses should be well below prevailing prices but well above your buy price. That perfection, of course, is not attainable shortly after buying, which is the most dangerous period for holding. Use the Blue and Green curves or a combination thereof for stop loss management shortly after buying.

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

For new buys, set stop losses at the blue or green values in the tables. If green is deeply lagging the prevailing price, you may want to average the blue and green prices for your stop losses. If the green curve is rising, set the stop loss just below it. Green is a common bouncing point. Consider a stop loss a percentage below its value. Once green passes above your buy price, then adjust your stop losses, periodically, say weekly, at or just below green. Once yellow passes above your buy price, you may want to set the stop loss at the yellow price. That is a good tactic when longer-term holding positions are supported with expected fundamentals and your enjoyment of owning a piece of a great company or fund.

If your stop loss triggered sell, while Indicant continues signaling hold, normal advice would be to buy again. However, if the Near-term Indicant is signaling bear/avoid, it is better to wait for specific buy signals from the Mid-term Indicant. In other words, other opportunities will be presented.

The ETF’s are signaled on the Near-term, Quick-term, and Short-term Indicant and are updated daily. These shorter-term models attempt participation in significant bullish spurts and rallies, while the Mid-term Indicant is focused on fundamentals and longer-term technical data.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 39.2% since its secular weekly low on October 9, 2002. The NASDAQ is up 99.6% and the S&P500 is up 38.6% since then. The small cap index, S&P600, is up 101.6% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 56.0% since its last weekly secular peak on March 9, 2000. The S&P500 is down 29.5% since its similar secular peak on March 23, 2000. The Dow is down by 13.5% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

As socialism increases, the NASDAQ may not hit its 2000 peak until after 2050. Even that depends on resurgence in entrepreneurialism and related capitalism. Politicians screwed up the economy and the majority apparently believed their proposed fixes in the 2006 congressional and 2008 presidential elections. All democracies eventually fail by virtue of tyranny of a stupid majority. We may be witnessing the early stages of that phenomenon, although recent events are suggesting resistance against the lazy brains of the 2006 and 2008 majority. More will be learned in Nov 2010. If the majority has their hands out, the markets will continue in their secular decline, using the pivot year of 2000. Since 2000, the capital markets are down. They will continue moving down if the majority has their hands out to their respective governments.

Politicians are now attempting to impose more constraints on business expansion and thus the continuation of wealth destruction should not be surprising. Politicians have deemed obsolete the normal efficiencies of capitalistic cleansing of the incompetent. That will wear down the capital markets as politicians continue their neurotic desires to expand their influence and control. Those leeches will eventually kill their host, but like all leeches, they continue on sucking away.

The NASDAQ year-to-date performance was bearish by 17.0% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 27.0% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The NASDAQ stock market bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 20.0%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was up on this weekend in 2004 by 1.1% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 5.6% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 3.8% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 6.7% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 9.5% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 16.0% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 3.5% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 28.4% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 22.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 22.7% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

Most major indices last cyclical bottom occurred on March 9, 2009. That includes the four major Dow Indices, the NASDAQ and all of the major S&P Indices. The only exception is the NASDAQ100. It encountered its weekly bottom on November 20, 2008.

The current Near-term Bear cycle, originating during the weeks of May 9 and May 16, 2010, may not fall below the March 9, 2009 cyclical bottoms. Even with that, statistics supported by 100% confidence, suggest the Reverse Tangential Projections will occur at some future point. Those projections are above these cyclical bottoms, but well below prevailing prices.

Although exact simultaneous bottoming did not occur on March 9, 2009, tracking from that pivot-point has been and will continue to be appropriate. This inexactness lends credence to the reverse tangential projections with short-term view, albeit mildly so. Consequently, March 9, 2009 is the pivot date to monitor performance since the March 2009 bottoming from the 2007-2008 bear cycle.

The Dow is up 54.9% since March 9, 2009. The NASDAQ is up 75.3% and the S&P500 is up 59.2% since then. The S&P600, Small Cap Index, is up 89.3% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, while the Short-term Indicant is now bearish.

Stock market corrections after such a rise do not need too much of an excuse to meander or even worse. Governments around the world, with the exception of China and possibly Japan, have borrowed too far ahead of real wealth creation. Monetary policies by those “fat governments” will not come from within, but with the harsh reality of their repeated impositions to real wealth creation. There is an upper limit to leech consumption, relative to the capacity for leeched items. Reality exerts itself without regard to its harshness or failing attempts by intellectuals, whose “real contribution/worth” is closer to zilch. The problem with leeches is their incessant desire to expand their capacity to do so.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

Click the above heading for a summary of hard economic indicators.

Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat when considering the United States as a single parameter. The world economy, on the other hand, is shaping a new dynamic.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation, coupled to interest rates, exceeding the limits of tolerance will induce a stock market bear.

Evolving as a force are monetary policies of foreign governments. Projecting the U.S. Fed’s position is becoming a bit more complicated. These projections must now include China and even more recently, that of Europe. Economic leeches around the world continue draining the productive. At some point that will result in unmanageable disproportions between the productive and the non-productive. History suggests this is generally addressed by varying levels of civil discourse. That is usually bearish, depending on location and severity. You have recently witnessed civil discourse in Greece. The question is, how much will this spread? Also, what new political mumbo-jumbo leaders will evolve from such crises? Such crises typically propel militant sort of folks to the top of the political heap. This typically leads to war, which is ultimately bullish, albeit painful.

Some short-term rates continue nudging north the past few weeks. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

The Fed can do little for economic stimulation. Interest rates cannot go much lower. If the economy cools even more, the Fed’s contribution to solutions is limited. In essence, the Fed has laid all its cards on the table. Rest assured the Fed would take every opportunity to enhance its position to influence economic activity. In essence, interest rates will be quick to rise when economic recovery is perceived as real and sustainable. This is one reason why the dollar has been strengthening lately. The Fed backed that up with a hike in the discount rate several weeks ago. Another reason for the dollar’s strengthening is the weakening of foreign currencies. It is not based on the dollar’s merit, but based on European incompetence, laziness, stupidity, and a continuation on stringent controls in the class system. The parasitical elite will maintain their status, regardless of consequence. Eventually, that consequence does not bode well for them and their offspring.

Oil prices continue vacillating in a range the Saudi Kingdom finds comfortable. As stated for several months, the kingdom continues asserting its leadership and regulating supplies to demands that will result in approximately $80/bbl for a lengthy period. Of course, normal human greed will occur and the result will be military action. Participants remain unknown, but most likely will begin with Israel and Iran, and concluding with the U.S. and Russia and possibly China. Any scenario is bullish for oil prices and bearish for the stock market from a longer-term perspective.

Several weeks ago, commodities began their elevation into the neutral zone from their bullish mini-cycle. Bearish yellow is now in a cyclical shift to the north, supporting a bullish cycle. However, they have been weakening the past few weeks, suggesting potential for a new bearish cycle. As earlier stated, a continuation of these configurations will eventually lead to inflation. Although commodity prices have weakened the past few weeks, their underlying Mid-term cyclical trend remains bullish. China’s credit tightening, coupled with expanding socialism in the West, is strategically bearish in the long-term for commodities and offering a bit of support to the prognosticators of deflation.

More recently, China is now expressing concerns regarding inflation. Commodity prices were rising, but that is against the trend for the time being. They have been taking it on the chin by the commodity bear the past few weeks. Increasing commodity prices will pressure rates more to the north. That will be non-bullish.

Gold is obviously anticipating significant inflationary behavior with paper currencies. It is also buffering portfolios against governmental policies around the world and a related increase is various forms of terrorism, militia developments, etc.

A tremendous amount of paper currency has been added to circulation well ahead of the productive efforts normally required to support those levels. Inflation typically follows that sort of political behavior. Increased socialism will inherently reduce supply of products and services, while paper money in the hands of the incompetent and non-productive will increase demand. At some future point, an I-Pod sort of product may cost well over $10,000. Only the “established elite” will enjoy those sorts of possessions, while the masses will have to relearn the drumbeats from their primordial past. Once that nonsensicality has passed, deflation will most likely follow. Interestingly, 2009’s PPI decline was the largest since 1938. Scroll down when clicking the link in the previous sentence.

The stimulus package, which was similar to FDR’s, predictably did not work. If the economy stalls again, more debt will be needed for yet another non-working stimulus, based on the errant thinking of contemporary leadership. The only one that works is a tax cut. That allows money to be used at maximum efficiency; in your hands as opposed to some yawning government bureaucrat and their corrupt partners.

There is one burgeoning bright spot developing. The Tea Party movement is highlighting the excesses of members of the economic burden/overhead group. Those, who do not add economic wealth, are getting wealthier than those who do. That is a recipe for quite a bit of drama. Union labor management does not understand this phenomenon. You have seen their ignorance displayed in Greece during late April and early May. Most union members in the manufacturing sector also do not understand. They will slowly devolve, as they have been doing for years and many will go to their graves unconscious of the stupidity their union dues supported. More and more will not live the American dream and that is their fault. Politicians will continue catering to those large voting blocks, but those large blocks will continue to shrivel into smaller segments. Hopefully, that will reverse the course of excessive economic leeching.

Educated economic overhead members do understand this phenomenon. They are very smart people. They are simply unproductive and do not add economic wealth. That does not deter them, though, from expanding their “taking” capacity. It is always interesting where the breech point occurs. The breech point is where they are slaughtered; either figuratively or physically. Economic wealth production is required in much more magnitude than the capacity to take. Since 2006, there is a gap of concern.

Gold was solidly bullish the past few days. Its upward price movement paralleled civil strife in Greece for a significant and noticeable period. The optimistic 2012 forecasted price of gold is holding at $1600. The low cyclical forecast for gold is holding at $1300. The meandering forecast remains at $1100. There are no quantifications suggesting a long-term decline in the price of gold in spite of the mysticism guiding its value.

As stated 91-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the resultant reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake.

The heart and soul of bullish seasonality concluded a bit earlier this year. The pessimistic outlook for the market has a good chance to unfold now. Politicians successfully ended the conclusion of the heart and soul of bullish seasonality near the end of January 2010 with the president’s state of the union address. Bearishness typically follows those speeches and there was no exception this year. However, the capitalistic system rebounded very well as the capital markets surged a few weeks later in early March and continued doing so until the Greek’s started rioting. Civil strife can spread and do so rapidly. That is bearish. The wars that follow, however, tend to be bullish to non-bearish, as wars invoke wealth building activities; extraction, manufacturing, and agriculture.

The above and below paragraphs may become obsolete, based on the mid-term elections this year. A high Congressional turnover should at the very least stalemate government; at best garnish enough veto overriding votes to repeal recent political stupidity.

The question remains, is public resistance to healthcare reform and other socialistic endeavors really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the stock market bear on the immediate horizon. Although healthcare reform garnished most of the attention in 2009, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market. European economic failures threaten the bull as well.

This is getting trickier since nearly one-half of the U.S. population does not pay federal income tax. Coupling that to union voters and government employees, who pay federal income tax, suggests over 50% is permanently in favor of socialism. That does not bode well for the capital markets. A new group of economic leeches is evolving; hundreds of thousands are not making their mortgage payments. They are using mortgage money to buy flat panel televisions and I-Pods, I-Pads, and whatnot. Others in California are using government money in gambling casinos. That is your tax dollars.

The population of economic leeches is over 50%. Their lack of discipline, though, keeps a fraction of them away from the voting booths. For those of you who have a sense of reality should hope that fractional amount reduces their voting powers to less than 50% of the populace.

There was no bear market in 2009. However, previously mentioned threats remain, “if taxes are raised on the highly productive and capital gained, do not be surprised at a 1,000 Dow by 2010.” The bear was passive between March 2009 and January 2010. It has plenty of time to demonstrate its reflection of a souring culture. The Blue Dogs disappointed in the recent healthcare vote. The lower character elements of society rise to the top of the political elite. That is bearish. You can see them on C-SPAN, where they pontificate the height of nonsensicality.

As stated the past 43-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 0.8% since then, annualizing at 1.1%. It has been bearish in ten out of the last 23-weeks, but solidly bullish in nine of the last 17-weeks. It was solidly bearish last week, following two weeks of solid bullishness.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 17.5% since then, annualizing at 21.4%. It was also bullish the past three weeks.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 1.3%, annualizing at 1.4% since its buy signal on July 31, 2009.

Fidelity Energy Services #40, FSESX, was up 107.2% since the Mid-term Indicant signaled buy on December 6, 2003. It received a sell signal on October 3, 2008. The Mid-term Indicant signaled sell on Sep 18, 2009, but endured a sell signal on May 21, 2010 without generating much return in that cycle. It is down 1.4% since the May 21 sell signal.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 7.8% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed.

Fidelity Energy #39, FSENX, was up 81.2% since the Mid-term Indicant signaled buy on August 16, 2003 and the sell signal on October 3, 2008. It disappointed on its recent buy signal and endured a sell signal on June 4, 2010. It is up 2.4% since the Jun 4, 2010 sell signal.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on May 20, 2010. It is up 1.1% since then. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on May 7, 2010. It is up 4.1% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 52.2% since that buy signal, annualizing at 33.5%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 10.6% since that buy signal, annualizing at 33.1%.

Most commodities were bullish the past two weeks while the energy services sector was also bullish in the same period. It will be interesting to see how the moratorium on drilling in the U.S. will play out. Fundamentally, it should be bearish for the energy services sector, while the oil companies should do well since oil prices should move to the north. They will enjoy more profits with less expense. They will drill around the world and most likely depart from U.S. political threats.

Mid-term Indicant Positions – Ten U.S. Indices

There were no new bull signals and no new bear signals.

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. Since then, the Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 0.5% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is up 0.5% since the Jun 4 bear signal, reflecting a bullish spurt, which reversed last week.

The eight remaining major indices retaining bull signals are up by an average of 13.8% since there respective bull signals an average of 47.0-weeks ago. That annualizes at 15.3%.

The Dow Utilities was the weakest bull since the July 31, 2009 bull signal and again enduring a bear signal. That contrasts with it being the strongest bull from 2003 through the overall stock market peaking in late 2007 when phony home loans created a phony demand for utility services.

Other than the Dow Utilities and the S&P100, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle, but it may receive a bull signal once pressure escapes convergence. That possibility diminished the past eight weeks with solid stock market bearishness in five of those eight weeks.

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,134,039. That beats buy and hold performance of $1,543,254 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $140,071. That beats buy and hold’s $105,472 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $202,623. That beats buy and hold’s $77,097 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

The Indicant’s percentage advantage over buy and hold does not change during bull signals. The advantage changes only during bear signals. That is because the buy and hold model has to keep holding, while the Mid-term Indicant model avoids bear markets. The only purpose of the Mid-term Indicant model is to avoid the bear markets. That is why it beat buy and hold by approximately 2,000% covering the past 100+ years. It will not be surprising to see the Mid-term Indicant outperform buy and hold by over 3,000% before the end of this decade. If the market remains bullish during this time, we’ll eat crow. It needs bears to outperform.

Click here for a tour of the Mid-term Indicant for major market indices.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

Click here for Mid-term Indicant Table of NASDAQ 100 Stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

Click here for Mid-term Indicant - Table of Dow Jones Industrial Average Stocks.

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

Click here for Mid-term Indicant - Dow Jones Utility Stocks Table.

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

Click here for Mid-term Indicant Table of Indicant Selected Stocks.

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 57.8% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

Remember never to keep more than 20% of your investment resources into a single mutual fund. Sector investing in mutual funds is an extremely good way to mix your investments.

Long Term Indicant Positions - Dow Jones Industrial Average

The blue-chip Long-term Indicant Bull signal was at 2895 for the DJIA in November 1991. Keep in mind the Long-term Indicant generated only five bull/bear cycles since 1920.

The Dow is up 250.4% (annualized at 13.4%) since the Long-term Indicant signaled bull 973-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

The Indicant website maintains the last twelve months of daily reports on an annual basis. These weekly reports are maintained on the website for much longer periods. Beginning in March 2006, the daily stock market report for the last trading day of each week is included in this weekly report. This allows web-based retention records of the daily report for much longer than the last twelve months. This report is in the next section and a mere repeat of the daily report you received on the last trading day of the week, which is usually on Friday evening.

Short-term Indicant Stock Market Report - Summary

As stated the past several days, the only remaining short-term attribute offering potential resistance to the stock market bear is the Quick-term Bearish Yellow Curve. The bull successfully argued with bearish ambition the week before last, but lost substance this past week.

Minor convergence is occurring. It is better to avoid transactions with Force Vector cycle maturing. The bear will gain momentum if they continue moving south, while the bear’s ambition will be delayed if they shift back to the north.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

The VIX is the lone NTI bull. It is up 23.8% since the bull signal 8.4-weeks ago. That annualizes at 146.7%.

The Near-term Indicant is signaling bear for the remaining eleven indices. They are down by an average of 3.4% since their bear signals an average of 7.0-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears. QTI bear signals this past May were the first since July 2009.

The Quick-term Indicant is signaling bull for six major indices. They are up by an average of 31.1%, annualizing at 30.8%, since their bull signals an average of 52.6-weeks ago.

The Quick-term Indicant is signaling bear for six indices. They are up by an average of 1.4% since their bear signals an average of 6.4-weeks ago. Their recent bullishness remains configured as a bullish spurt and unsustainable, which was obviated this past week.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

Quick-term Attributes (This is a longer cycle than Near-term cycles)

QTI-Red Bull Count; No non-contrarians; no bullish support.

QTI-Bullish Red Curve Trend; Five non-contrarians moving bullishly; weakening bullish support.

QTI-Yellow Bear Count; One of the non-contrarians is below the bearish yellow curve, but bearish gravitational forces continue.

QTI-Bearish Yellow Curve Trend; Non-bearish minority with five of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias along this slower cycle. However, even this strong resistance point is losing its capacity to do so, although recently offering some resistance to bearish ambition.

The Quick-term Indicant is no longer supportive of the QTI Bull due recent bear signals.

Near-term Attributes (This is a shorter cycle than the Quick-term cycles)

NTI-Blue Bull Count; no non-contrarians; no near-term bullish support.

NTI-Bullish Blue Curve Trend; All non-contrarians sloping negatively; no bullish support.

NTI-Bearish Green Curve Trend; All non-contrarians sloping negatively; no non-bearish support.

The Near-term attributes continue inflecting with an increasing bias, favoring the bear. Both NTI Bullish Blue and NTI Bearish Green are sloping south and thus solidly bearish on a near-term basis.

Short-term Force Vectors and Pressure Attributes

STI-Force Vector Domain Position; None of the non-contrarians are in bullish domains offering no bullish support.

STI-Force Vector Position Relative to Vector Pressure; None of the non-contrarians are above Pressure.

STI-Force Vector Direction; None of the non-contrarians are moving north. As stated the past few days, they are ominously configured in support of additional bearish behavior. You saw that with bearish aggression in three of the last four days.

STI-Vector Pressure Trend; Six of the non-contrarian indices are moving bullishly; no bullish support because Force is moving south.

STI-Vector Pressure Position; Zero non-contrarians are in bullish domains; no bullish support.

Short-term Market Summary

Short-term attributes are supporting the bear. Configurations are interesting. Force Vectors finally fell below Pressure and into bearish domains. If they continue moving south, expect a dynamic bear. If they redirect back to the north and elevate Pressure into bearish domains, bearish aggression will be muted.

-Tangential Protection – None!

-Political Climate – Favorable to bear!

-Reverse Tangential Bearish Detection – We can now monitor this phenomenon, as we are now enduring a significant Near-term bearish cycle. The timing is unknown, but there is 100% confidence the major indices and ETF’s will eventually fall to those prices noted in the below link.

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds continue favoring it will occur in this bearish cycle. Political and historical cycles suggest this should manifest before the heart and soul of bullish seasonality this autumn. Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when?

The Quick-term bearish yellow curve stands between the above claim and prevailing prices. If prices fall below this bearish yellow curve, the probability of tangential bearishness in this cycle will be high. The Dow Utilities moved toward supporting this phenomenon several weeks ago. A few more major indices joined the Dow Utilities in the past few weeks.

Click the Short-term Indicant to see the combined table of the Near-term Indicant, Quick-term, and Short-term Indicant. The table has links to charts for each. Each chart contains all three models and there are two separate buy and sell signals for the Near-term and/or Quick-term Indicant.

The tour is still being developed, but most of you are now familiar with the Near-term bull/bear cycles as well as the tangential protections and reverse tangential bearish detectors.

Indicant Volume Indicators

Volume indicators remain lethargic, as the previous robust cycle expired several days ago. Some of this contemporary lethargy is traced to seasonal behavior. The expiring robustness configured during solid bearish expressions during May and early June. Therefore, volume relationships are biased in favor of the bear. (Recent chronological observations are expressed below in reverse order).

Jun 25, 2010-Fri-Volume was relatively high due to fund content rotation, as opposed to real stock market interest. Bearish bias remains in tact.

Jun 24, 2010-Thu-Same as yesterday. Several weeks have elapsed without significant volume. Substantive directional shifts require more volume. Therefore, bias remains favorable to the bear’s ambition.

Jun 23, 2010-Wed-Mediocre volume on flat market behavior suggests status quo continuations; bearish bias prevails.

Jun 22, 2010-Tue-The Indicant Volume Indicator is reflecting soft volume, some of which is seasonal. The bull will not be inspired with this behavior. Today’s bearish aggression was accompanied with normal volume. Bearish bias prevails.

Jun 21, 2010-Mon-Light volume on bearish behavior continues in support of the short-term bear cycle.

Jun 18, 2010-Fri-Seasonally low volume on flat stock market behavior offers nothing on bias shift. The stock market remains with bearish bias on a short-term basis.

Short-term ETF Report Card, Status, and Charts

The Near-term Indicant generated no buy signals and no sell signals.

The Near-term Indicant is signaling hold for three ETF’s. They are up by an average of 9.2%, annualizing at 46.2%, since their buy signals an average of 10.3-weeks ago.

The NTI is avoiding 28-ETF’s. They are down an average of 1.8% since their sell signals an average of 5.8-weeks ago.

The Quick-term Indicant generated no buy signals and no sell signals.

The Quick-term Indicant is signaling hold for 13-ETF’s. They are up an average of 32.1% since their buy signals an average of 54.7-weeks ago. Those with hold signals are annualizing at 30.5%.

The Quick-term Indicant is avoiding 18-ETF’s. They are down by an average of 0.7% since their sell signals an average of 7.7-weeks ago. These avoided ETF’s include contrarian QID, which is down 60.4% since its QTI sell signal over a year ago on Mar 26, 2009.

Near-term Indicant ETF Key Attributes

NTI Blue Bull Count; Only one non-contrarian; no bullish support.

NTI Blue Curve Trend: several of non-contrarians shifted north late last week, reflecting bullish spurt behavior as opposed to bullish sustainability.

NTI Green Bear Potential Count; all non-contrarians; there is no near-term non-bearish support.

NTI Green Curve Trend; none of the non-contrarians are sloping north; no non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; no non-contrarians; no bullish support.

QTI Bullish Red Curve Trend; None of the non-contrarians are sloping north and without bullish support.

QTI Bearish Yellow Curve Trend; nine non-contrarians are sloping north, highlighting non-bearishness along a slower moving plane. As stated the past few days, this non-bullish attribute is under bearish threat. This normally resistive level is acquiescing to the bear’s desire without much fight until late last week. Keep in mind, this is merely resisting the bear; not defeating it.

The Short-term Indicant ETF Key Attributes:

STI Force Vectors are now moving bearishly. If they waver in bullish domains, bearish ambition will be muted.

STI Force Vector Position; only three non-contrarians are populating bullish domains, offering minimal bullish support. Force Vectors continue their decline. If Force does not continue its decline, then bearish prognoses may be adjusted.

Vector Pressure Position; None of non-contrarians are in bullish domains; no bullish support and increasing bearish support.

Vector Pressure Trend; 25-of the non-contrarians are moving north, reflecting the bullish spurt; there is very limited bullish support and increasing bearish support.

Short-term Summary: Most attributes are supporting the Short-term Bear.

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell on May 7, 2010. It is down 4.1% since that sell signal. The Quick-term Indicant signaled sell on May 20, 2010, as its price fell below QTI Bearish yellow curve. It is up 1.1% since the QTI sell signal. It will be interesting to see if Force Vectors continue plummeting.

ETF#11-Gold and Precious Metals is up 52.2% since the QTI signaled buy on December 11, 2008. Annualized growth is at 33.5%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $106.12 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 10.6% since that buy signal, annualizing at 33.1%.

Click this sentence for additional charting and current forecasting of the actual price of gold.

As stated for the last year-plus months, gold remains fundamentally sound for long-term holding and a technical measure of authenticity in that assessment is in its bearish yellow curve. If it crosses below bearish yellow, you will not want to be holding. The Quick-term Indicant will highlight that potential when this occurs. A strengthening dollar is somewhat of an evolving threat to gold, but again, continue holding until the price interacts with the bearish yellow curve.

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 8.7% since those buy signals, annualizing at 52.8%. This ETF is increasing its bullish attributes. It is usually contrarian to the overall stock market, which adds to an increased overall stock market bearish prognosis.

The Near-term Indicant signaled buy for ETF#31-QID on Thursday, May 13, 2010. It is up 8.3% since then, annualizing at 69.7%.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 60.4% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $20.08 and still falling. Its rate of decline is slowing to less than a nickel per day.

Major ETF Events

Jun 25, 2010-Fri-Force Vectors are maturing. If they shift back to the north, the bear’s ambition will be delayed/muted.

Jun 24, 2010-Thu-Opening bearishness stayed bearish. Although this discouraged put option opportunities, those purchased last Fri and early Mon morning performed very well.

Jun 23, 2010-Wed-No major technical events. Fundamentally, oil inventories continue to rise and the unpublished M3-Money Supply continues to contract. Both are bearish.

Jun 22, 2010-Tue-Late session aggressive bearishness occurred again. Contrarian ETF #03 – Energy was not contrarian on today’s bearishness. This fund and related sector may not be contrarian for several months. However, we will continue identifying it as contrarian, based on historical merit.

Jun 21, 2010-Mon-Aggressive bullishness at the opening, followed by aggressive bearishness at the close suggests bearish bias will continue.

Jun 18, 2010-Fri-As usual, there was little volatility on this quadruple witching day.

Current Strategy-Short-term Indicant- Jun 25, 2010-Fri-A minor convergence is occurring and thus important to not buy options. Jun 24, 2010-Thu-Force Vectors are at a critical point. Do not buy any options. Jun 23, 2010-Wed-Same. Jun 22, 2010-Tue-Same as yesterday. Jun 21, 2010-Mon-Short-term attributes continue in support of the bear in spite of recent bullishness.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

Short-term Indicant for DJIA and NASDAQ

Short-term Indicant Tables for the Dow Jones Industrial Average Index

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

The stock market endured bearish convergence last week, following bullish convergence in the prior two weeks. However, a combined bearish convergence/divergence in five of the past nine weeks remains as a dominant theme. Periodic bullish spurts have dampened bearish enthusiasm, but not escaping it entirely.

Bearish convergence was endured for four consecutive weeks ending 20-weeks ago. Bearish convergence of four consecutive weeks is strategically bearish. It, however, has not upset the Mid-term Indicant bullish attributes. Its threat has diminished by virtue of recent successes at bullish convergence/divergence, but lingers since short-term attributes are having difficulty escaping a converging configuration. Recent bearishness, in essence, is placing the market at about the same point it was at the conclusion of those four consecutive weeks of bearish convergence from last February. In effect, the markets are saying, the March-April bullish behavior was a mere bullish spurt.

Indicant Conclusion

Conclusions remain relatively static for the past several weeks. However, there are a few adjustments.

As stated the past thirty-seven weeks, low interest rates are imposing narrowed alternative investment opportunities. The expiration of the Near-term Bull again suggests this is an increasingly irrelevant observation, relative to more worldly dynamics.

The capital markets crushed the early February threat by the stock market bear with a strong bullish spurt in March and April. Unfortunately, bearish behavior in five of the last eight weeks offset the March-April bullish surge. That suggests the early February bearish threat had more merit than the Mar-Apr bullish surge.

Fundamental economic data had been improving, but the wasteful stimulus package is now running out of steam. Keep in mind, the effectiveness of the 2009 stimulus package was about as ineffective as they come. That, coupled with declining economic outlooks adds to the bear’s stimulation by more broad economic fundamentals. The bear’s delight is sourced primarily from Europe and now expanding to the U.S.

Politicians continue adding bearish punch. Cap and trade legislation, based on mystical global warming and now to the oil slick in the Gulf of Mexico, is bearish as it sucks money from capitalists and places it in the hands of politicians and government bureaucrats, inviting greater inefficiencies in its use. A recent resurrection of drilling moratoriums should inspire the bear for yet more drama. Much of this favors inflation, but the jury is still out on that.

Short-term attributes remain a concern. As stated the past six weeks, the problem of Vector Pressure remaining in a near-converging pattern for several weeks offered a technical avenue for the bear’s encouragement. Collapsing NTI Blue Curves and declining Vector Pressure are adding to the stock market bear’s arousal.

Short-term pressure is now residing in bearish domains. That provides bearish confidence on a short-term basis.

Recent bearishness appears more technical than fundamental. Riots in Greece, political attacks on Goldman Sachs, and Europe’s economic instability is fundamentally supportive of the bear’s ambition. Adding to that is the threat of profit taking from the energy services sector due to the oil spill in the Gulf of Mexico and the consequential moratorium on offshore drilling in addition to the economic drain in that region of the country.

However, overall corporate earnings had been expected to continue improving, which is the ultimate fundamental element. Austere measures by all governments, along with a reduction in civil strife, should inspire the bull once bearish momentum subsides. As of six weeks ago, though, the Short-term Indicant is suggesting an increased bearish bias. Do not be surprised at a reduction in projected earnings in the next few quarters.

Keep up with the daily stock market report as the Quick-term and Near-term attributes can shift quickly.

Do not get lazy and set those stop losses for those stocks and funds that continue to enjoy hold signals.

The daily updates are on the following link.

http://www.indicant.net/Non-Members/Back%20Issues/QT.htm

Hyperlinks

To access all major markets, stocks, funds, economic data, charts, statuses, etc, click the following hyperlink:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Summary.htm

Once you are inside the website, click on "members update" or simply log in. It is on the top of every page in the web site so you can always find your way back.

Happy Investing,

www.indicant.net

06/27/2010

Jun 20, 2010 Indicant Weekly Stock Market Report

Volume 06, Issue 03 ISSN 1526 6516 © The Indicant Stock Market Report

Stock Market Review

Volume is stagnant. Current stagnation can be traced, in part, to seasonality, where summer volume is traditionally low. Although there are bullish cycles in the summer months, most are muted when compared to late autumn bullish cycles. Low volume bullishness should always be viewed with suspicion, while low volume bearishness tends to reflect honest merit.

One common attribute following a nice bull leg, such as the one enjoyed between late March 2009 and early May 2010, is choppy market behavior. Long periods of choppiness can occur without any clear directional intensity. Although such choppiness can be disappointing, and in some cases, downright discerning to the average investor, it allows one a longer period to assess their market positioning and long-term portfolio objectives. The trick is knowing that each bear cycle spurt will in fact be followed by a sharp bull cycle and back and forth.

As long as flat volume accompanies such choppiness, the market usually continues without directional commitment. A volume surge paralleling a sharp stock market movement in either direction offer obviations of directional intensity on a short-term basis. The last series of volume surges several weeks ago support a bearish theme. The bullish spurt the past two weeks has not enjoyed such a volume surge.

The Quick-term Bearish Yellow Curve indeed buffered bearish ambition last week. The stock market rebounded nicely shortly after interacting with bearish yellow the past two weeks. There was no fundamental reason for this. It just happened, which is more common than not. The S&P100 and Dow Utilities participated in the bullish spurt, but from below the Quick-term bearish yellow curve. That is not a bullish attribute since those two indices breeched bearish yellow.

The Quick-term Bearish Yellow Curve is a point where markets fall to for bullish bounces purposes. Since 1900, it is that point where the Dow falls to the most amount of times, followed by a bullish bounce. Sometimes that bounce continues with significant sustainability and at other times, it is a mere spurt quickly followed by a major bear leg. However, the bearish yellow curve generally offers the bull a defensive mechanism against bearish ambition.

If the major indices contact bearish yellow again without an interaction with the Mid-term and Quick-term Bullish Red Curves, bearish yellow will become more anemic as a defense against bearish ambition. A second interaction with bearish yellow without a bullish red interaction typically inspires the bear to dominate.

Stock market choppiness most often occurs during presidential post election years. The last one in 2009 did not fulfill this historical standard. The next one is 2013 and most of us are not concerned about stock market behavior three years from now. The stock market is down so far this century and there is little evidence at this point to suggest that bearish trend will be disrupted. Voodoo bookkeeping by some corporations and the Federal Government are not bullishly inspiring. The national debt of the developed countries continues to threaten bullish inspiration.

Mid-term election years historically offer a market bottom from the historically bearish post election years. If 2010 conformed to that historical standard, one could argue that bottom is already behind us. Others could argue it is ahead of us. Such arguments are not helpful to any of us. However, traditional standards from history are worthy of consideration.

Politicians are very influential on stock market behavior. If they are lazy or inactive, the stock market tends to be bullish. If politicians become active, the stock market tends to be bearish. That is because politicians can do nothing in a positive way that creates wealth. Their only direct contribution is wealth destruction.

Stock market choppiness and stock market bearishness during presidential post election years is due to excessive political influences on the economy. Newly elected administrations generally enjoy more success in their first year in office and thus the reason for historical bearishness in post election years. Economic meddling by politicians leads to either choppiness or bearish behavior. Incumbent administrations typically start losing their popularity in mid-term election years and with that a loss in power. That is generally bullish, as the “taking” capacity is reduced with their declining popularity. That is why the mid-term election year typically offers a pivot point for stock market bullishness.

The reverse tangential line 100% accurately describes a point where the stock market will fall to or below at some future point. It is impossible to forecast when that will happen. The current values of this phenomenon are on the website. Clicking this sentence will take you to that link.

Fundamentally, one can ask the following question: Are corporate earnings’ projections two to three quarters from now going to better than their projections in May 2010, March 2009, and late 2007?

That is actually more than one question, since there are three periods of interest. The last period is the primary one of interest. The great bull leg from early 2003 through late 2007 was fundamentally justified, based on the numbers. Corporate earnings via economic expansion were harmonized with the stock market at that time. Since then, we have found out that some of that economic expansion was phony since it was politically induced. That political inducement created a housing bubble. All politically induced economic stimulants eventually collapse. There are no exceptions because politicians can do nothing positively for the economy.

After the stock market peak in late 2007, normal adjustments were endured with 2008’s stock market bear. In March 2009, the stock market sensed fundamental stability in corporate earnings and reacted with appropriate bullishness.

What did the stock market sense in early May of this year, which is the last near-term cyclical peak? The Greece riots and stagnant European economy contributed to this newly evolving bearish outlook. Incompetence by the U.S. Government should not be surprising, but bearish nonetheless, with respect to the handling of the Gulf oil spill.

U.S. politician’s “shakedown” of British Petroleum is definitely bearish. This is occurring without due process. This has been exposed as another political opportunity to garnish funds from the productive and pass it through governmental bureaucracy. The U.S. politicians will then use this money rotation scheme for their own egotistical purposes. They again have manifested a way to “give” to others, even though they have to “take” from someone else.

There is little difference between contemporary U.S. politicians and those of most banana republics. U.S. politicians apparently found success in avoiding the normal due process. The rest of the world will see this as subtracting from “safety,” which is normally appealing from abroad. This will dampen the demand for stocks in the U.S. markets. Fundamentally and technically, that is bearish. The reduction in capital stock prices will eventually lead to a reduction in capital spending and the spiral of bearish ambition will again find enjoyment.

Producers, such as Apple’s iPhone 4, will stimulate demand with product appeal, contrasting to that of the politician’s effortless coercion used in “taking.” The bull and bear will wage battles with the bear representing political forces while the bull represents honest forces. The question is, which will induce the most force? The bull and the bear will answer that question in the next few months. Configurations continue suggesting that political forces are strengthening. That is bearish.

Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds – Mid-term Indicant

Click this sentence for a graphical summary of what follows. Simply scroll down the page to see graphical and detail content of this section.

The Mid-term Indicant generated no buy signal and one sell signal.

The Mid-term Indicant is signaling hold for 191 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 36.7%. That annualizes to 36.6%. The Mid-term Indicant has been signaling hold for these 191-stocks and funds for an average of 52.0-weeks.

The Mid-term Indicant is avoiding 124-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 28.9% since the Mid-term Indicant signaled sell an average of 73.3-weeks ago.

One year ago, on Jun 19, 2009, the Mid-term Indicant was holding only 22-stocks and funds out of 344 tracked for an average of 100.2-weeks. They were up by an average of 124.1% (annualized at 63.9%). There were 322-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 27.2% since their respective sell signals an average of 54.0-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 159-stocks and funds of the 345-tracked two years ago on Jun 20, 2008. They were up by an average of 192.7% (annualized at 63.6%) since their respective buy signals an average of 157.4-weeks earlier. The Mid-term Indicant was avoiding 163-stocks and funds at that time. They were down an average of 17.8% since their respective sell signals an average of 27.9-weeks earlier.

There were 314-stocks and funds with hold signals on Jun 15, 2007 since their buy signals an average of 105.3-weeks earlier. They were up by an average of 131.5% (annualized at 64.9%). There were 31-avoided stocks and funds at that time. They were down by an average of 14.2% from their respective sell signals an average of 27.8-weeks earlier.

On Jun 16, 2006, the Mid-term Indicant was signaling hold for 212-stocks and funds out of 345-tracked. They were up by an average of 142.1% (annualized at 67.0%) since their buy signals an average of 110.3-weeks earlier. The Mid-term Indicant was avoiding 124-stocks and funds at that time. They were down by an average of 6.0% since their sell signals an average of 14.0-weeks earlier.

Five years ago, on Jun 17, 2005, there were 208-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 103.4% (annualized at 59.0%) since their respective buy signals an average of 91.1-weeks earlier. There were 112-avoided stocks and funds then. They were down an average of 24.7% since their respective sell signals an average of 59.7-weeks earlier.

On Jun 18, 2004, there were 249-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 72.0%, annualizing at 70.8%, since their respective buy signals an average of 52.8-weeks earlier. There were 42-avoided stocks and funds then. They were down by an average of 18.2% since their sell signals an average of 26.3-weeks earlier.

There were 289-stocks and funds with hold signals on Jun 20, 2003. They were up by an average of 44.5%, annualizing at 110.4%, since their buy signals 21.0-weeks earlier. The two avoided stocks and funds were down an average of 27.5% since their respective sell signals an average of 27.2-weeks earlier.

On June 21, 2002, there were 81-stocks and funds with a hold signal, enjoying a 37.2% gain since their respective buy signals an average of 37.6-weeks earlier. That annualized at 37.2%. There were 201-avoided stocks at that time. They were down 24.0% since their sell signals an average of 9.5-weeks earlier.

Summary of Stocks and Funds with Buy and Sell Signals This past Week

To maintain appropriate security, you can see the Mid-term Indicant "buy/sell" signals for stocks and funds for this week by clicking the following link. It is in the member’s only section.

Click this link to this week’s buy and sell signals.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Summary.htm

Comments about Mid-term Indicant Buy and Sell Signals This Weekend

The Long-term and Mid-term attributes have not yet succumbed to the stock market bear’s ambition, but with an increasing probability to do so.

The Dow Utilities shifted in favor of the bear on a Mid-term basis in early Feb 2010. The S&P100 Index received a Mid-term Bear signal on Jun 4, 2010. Since then, the bear has encountered resistance.

The expected bullish spurt is continuing. This threat to the bear continues muting sell signals in a big way.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.htm

Stop Loss Management

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 43.4% since its secular weekly low on October 9, 2002. The NASDAQ is up 107.3% and the S&P500 is up 43.9% since then. The small cap index, S&P600, is up 108.0% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 54.2% since its last weekly secular peak on March 9, 2000. The S&P500 is down 26.8% since its similar secular peak on March 23, 2000. The Dow is down by 10.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The NASDAQ year-to-date performance was bearish by 19.5% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 20.9% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 25.6%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 0.8% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 3.9% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 3.4% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 8.7% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 8.4% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 14.6% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 2.5% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 26.2% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 19.2% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 20.2% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

The Dow is up 59.6% since March 9, 2009. The NASDAQ is up 82.1% and the S&P500 is up 65.2% since then. The S&P600, Small Cap Index, is up 95.3% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, while the Short-term Indicant is now bearish.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

Click the above heading for a summary of hard economic indicators.

As stated 90-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the resultant reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake.

The question remains, is public resistance to healthcare reform and other socialistic endeavors really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform garnished most of the attention in 2009, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market. European economic failures threaten the bull as well.

This is getting trickier since nearly one-half of the U.S. population does not pay federal income tax. Coupling that to union voters and government employees, who pay federal income tax, suggests over 50% is permanently in favor of socialism. That does not bode well for the capital markets. A new group of economic leeches is evolving; hundreds of thousands are not making their mortgage payments. They are using mortgage money to buy flat panel televisions and I-Pods, I-Pads, and whatnot. The population of economic leeches is over 50%. Their lack of discipline, though, keeps a fraction of them away from the voting booths. For those of you who have a sense of reality should hope that fractional amount reduces their voting powers to less than 50% of the populace.

As stated the past 42-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is up 3.8% since then, annualizing at 5.5%. It has been bearish in nine out of the last 22-weeks, but solidly bullish in nine of the last 16-weeks. It was solidly bullish the past two weeks.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 17.7% since then, annualizing at 22.2%. It was also bullish the past two weeks.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 6.4%, annualizing at 7.1% since its buy signal on July 31, 2009.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 3.1% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on May 20, 2010. It is up 6.6% since then. It is undergoing a mere bullish spurt at this time. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on May 7, 2010. It is up 1.1% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 52.3% since that buy signal, annualizing at 34.0%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 10.6% since that buy signal, annualizing at 35.5%.

Mid-term Indicant Positions – Ten U.S. Indices

There were no new bull signals and no new bear signals.

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. The Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 5.2% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is up 4.4% since the Jun 4 bear signal, reflecting a bullish spurt.

The eight remaining major indices retaining bull signals are up by an average of 20.5% since there respective bull signals an average of 46.0-weeks ago. That annualizes at 18.1%.

Other than the Dow Utilities and the S&P100, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle, but it may receive a bull signal once pressure escapes convergence. That possibility diminished the past seven weeks with solid stock market bearishness in four of those seven weeks. The past two weeks enjoyed a bullish rebound, but the configurations suggest that is a mere bullish spurt (sucker rally).

The Mid-term Indicant Dow Jones Industrial Average performance is at $30,015,286. That beats buy and hold performance of $1,589,935 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $145,371. That beats buy and hold’s $109,463 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $210,489. That beats buy and hold’s $80,090 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

Click here for a tour of the Mid-term Indicant for major market indices.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

Click here for Mid-term Indicant Table of NASDAQ 100 Stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

Click here for Mid-term Indicant - Table of Dow Jones Industrial Average Stocks.

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

Click here for Mid-term Indicant - Dow Jones Utility Stocks Table.

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

Click here for Mid-term Indicant Table of Indicant Selected Stocks.

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 61.0% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

Remember never to keep more than 20% of your investment resources into a single mutual fund. Sector investing in mutual funds is an extremely good way to mix your investments.

Long Term Indicant Positions - Dow Jones Industrial Average

The blue-chip Long-term Indicant Bull signal was at 2895 for the DJIA in November 1991. Keep in mind the Long-term Indicant generated only five bull/bear cycles since 1920.

The Dow is up 261.0% (annualized at 14.0%) since the Long-term Indicant signaled bull 972-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

As stated the past few days, the only remaining short-term attribute offering potential resistance to the stock market bear is the Quick-term Bearish Yellow Curve. Unfortunately, this resistance has been pathetic until the past few days, where the bull successfully argued with bearish ambition.

Force Vectors are at maximums. This suggest imminent non-bullishness with increasing probabilities of strong bearishness. If they meander or continue their increase, bearish bias may be voided in favor of bullish bias. The probability of that is low at this time.

Continue considering bullish behavior as mere bullish spurts in the face of a dominant short-term bear.

Put options are appealing.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

The VIX is the lone NTI bull. It is up 3.9% since the bull signal 7.4-weeks ago. That annualizes at 27.3%. It is now below NTI bearish green. That remains a bullish configuration, but disappointing to the VIX bull the absence of a bullish bounce off of NTI-Green. If the VIX is not bullish in the next day or two, the near-term survivability of this VIX bull is questionable.

Its bearish cycle Force Vector is mature, inviting an imminent bullish response. The nature of that response will add some obviations of directional intensity.

The Near-term Indicant is signaling bear for the remaining eleven indices. They are up by an average of 0.3% since their bear signals an average of 6.0-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears. QTI bear signals this past May were the first since July 2009.

The Quick-term Indicant is signaling bull for six major indices. They are up by an average of 32.1%, annualizing at 32.4%, since their bull signals an average of 51.6-weeks ago.

The Quick-term Indicant is signaling bear for six indices. They are up by an average of 5.2% since their bear signals an average of 5.4-weeks ago. Their bullishness remains configured as a bullish spurt and unsustainable.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

Quick-term Attributes (This is a longer cycle than Near-term cycles)

QTI-Red Bull Count; No non-contrarians; no bullish support.

QTI-Bullish Red Curve Trend; Five non-contrarians moving bullishly; weakening bullish support.

QTI-Yellow Bear Count; None of the non-contrarians are below the bearish yellow curve, but bearish gravitational forces continue.

The Quick-term Indicant is no longer supportive of the QTI Bull due recent bear signals.

Near-term Attributes (This is a shorter cycle than the Quick-term cycles)

NTI-Blue Bull Count; ten non-contrarians; no near-term bullish support, as this reflects recent spurt behavior.

NTI-Bullish Blue Curve Trend; All non-contrarians sloping negatively; no bullish support.

NTI-Bearish Green Curve Trend; All non-contrarians sloping negatively; no non-bearish support.

The Near-term attributes continue inflecting with an increasing bias, favoring the bear. Both NTI Bullish Blue and NTI Bearish Green are sloping south and thus solidly bearish on a near-term basis.

Short-term Force Vectors and Pressure Attributes

STI-Force Vector Domain Position; Ten of the non-contrarians are in bullish domains offering no bullish support since configurations indicate a bullish spurt as opposed to sustainability. They are configuring in support of non-bullishness at best, more bearishness at worse.

STI-Force Vector Position Relative to Vector Pressure; Nine of the non-contrarians are above Pressure but not offering bullish support. Just reflecting bullish spurt behavior.

STI-Force Vector Direction; Five of the non-contrarians are moving north. However, there is no bullish potential manifesting. As stated the past few days, they are ominously configured in support of additional bearish behavior.

STI-Vector Pressure Trend; None of the non-contrarian indices are moving bullishly; no bullish support.

STI-Vector Pressure Position; Zero non-contrarians are in bullish domains; no bullish support.

Short-term Market Summary

Short-term attributes are supporting the bear. Vector Pressure is not offering bullish hope. The last line of defense against the bear is the Quick-term bearish yellow curve. This potential resistance remains, but enduring pricing proximity and related threats by the bear. You should have noticed some of that resistant behavior the past few days. That is all it is; just resisting the bear; not defeating it.

-Tangential Protection – None!

-Political Climate – Favorable to bear!

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year (2010). Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when?

The tour is still being developed, but most of you are now familiar with the Near-term bull/bear cycles as well as the tangential protections and reverse tangential bearish detectors.

Indicant Volume Indicators

Jun 18, 2010-Fri-Seasonally low volume on flat stock market behavior offers nothing on bias shift. The stock market remains with bearish bias on a short-term basis.

Jun 17, 2010-Thu-Same old story. Bearish bias remains on weak volume.

Jun 16, 2010-Wed-Low volume on meandering behavior is not indicative of bias shift. It remains bearish.

Jun 15, 2010-Tue-Impressive bullish behavior on mediocre volume does not warrant a bias shift. It remains bearish.

Jun 14, 2010-Mon-Again low volume will not shift from bearish bias.

Jun 11, 2010-Fri-Very low volume on mild bullishness continues in support of bearish bias on a short-term basis.

Short-term ETF Report Card, Status, and Charts

The Near-term Indicant generated no buy signals and no sell signals.

The Near-term Indicant is signaling hold for three ETF’s. They are up by an average of 6.1%, annualizing at 34.2%, since their buy signals an average of 9.3-weeks ago.

The NTI is avoiding 28-ETF’s. They are up an average of 1.0% since their sell signals an average of 4.8-weeks ago.

The Quick-term Indicant generated no buy signals and no sell signals.

The Quick-term Indicant is signaling hold for 13-ETF’s. They are up an average of 36.1% since their buy signals an average of 53.7-weeks ago. Those with hold signals are annualizing at 35.0%.

The Quick-term Indicant is avoiding 18-ETF’s. They are up by an average of 1.4% since their sell signals an average of 6.7-weeks ago. These avoided ETF’s include contrarian QID, which is down 63.3% since its QTI sell signal over a year ago on Mar 26, 2009.

Near-term Indicant ETF Key Attributes

NTI Blue Bull Count; 26-non-contrarians; no bullish support, as recent bullishness is a mere spurt.

NTI Blue Curve Trend: several of non-contrarians shifted north, reflecting bullish spurt behavior as opposed to bullish sustainability.

NTI Green Bear Potential Count; all non-contrarians; there is no near-term non-bearish support.

NTI Green Curve Trend; none of the non-contrarians are sloping north; no non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; no non-contrarians; no bullish support.

QTI Bullish Red Curve Trend; None of the non-contrarians are sloping north and without bullish support.

QTI Bearish Yellow Curve Trend; nine non-contrarians are sloping north, highlighting non-bearishness along a slower moving plane. As stated the past few days, this non-bullish attribute is under bearish threat. This normally resistive level is acquiescing to the bear’s desire without much fight until the past five days. Keep in mind, this is merely resisting the bear; not defeating it.

The Short-term Indicant ETF Key Attributes:

STI Force Vector Direction; all non-contrarians moving bullishly. As stated last May 26, do not be surprised at a mild bullish spurt, followed by more bearish aggression in the next five to ten days. You saw that three weeks ago. Another bullish spurt is underway. Do not be surprised at more bearishness in the next few weeks. This spurt may have some sustainability of days/weeks and not months. The bear remains dominant.

STI Force Vector Position; twenty-five non-contrarians are populating bullish domains, but temporarily so. Force Vectors are peaking and primed to support bearish behavior. If Force does not fall sharply, then bearish prognoses may be adjusted.

Vector Pressure Position; None of non-contrarians are in bullish domains; no bullish support and increasing bearish support.

Vector Pressure Trend; 24-of the non-contrarians are moving north, reflecting the bullish spurt; there is very limited bullish support and increasing bearish support.

Short-term Summary: Most attributes are supporting the Short-term Bear.

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell on May 7, 2010. It is up 1.1% since that sell signal. The Quick-term Indicant signaled sell on May 20, 2010, as its price fell below QTI Bearish yellow curve. It is up 6.6% since the QTI sell signal. Pressure remains in bearish domains and thus non-threatening to its bearish prognosis.

ETF#11-Gold and Precious Metals is up 52.3% since the QTI signaled buy on December 11, 2008. Annualized growth is at 34.0%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $105.49 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 10.6% since that buy signal, annualizing at 35.5%.

Click this sentence for additional charting and current forecasting of the actual price of gold.

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 7.2% since those buy signals, annualizing at 49.6%. This ETF is increasing its bullish attributes. It is usually contrarian to the overall stock market, which adds to an increased overall stock market bearish prognosis.

The Near-term Indicant signaled buy for ETF#31-QID on Thursday, May 13, 2010. It is up 0.6% since then, annualizing at 6.0%.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 63.3% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $20.26 and still falling. Its rate of decline is slowing.

Major ETF Events

Jun 18, 2010-Fri-As usual, there was little volatility on this quadruple witching day.

Jun 17, 2010-Thu-Attributes solidified in their position of a bearish response to recent bullish behavior.

Jun 16, 2010-Wed-Force Vector are at prior maximums. This suggests a reversal, which should encourage bearish behavior. If they meander or continue to increase, bias may change to bullish, depending on the behavior of other attributes. However, probabilities are high for immediate non-bullishness (at best) to strong bearishness (at worse).

Jun 15, 2010-Tue-Strong bullish behavior challenged the bear, as prices continue recoiling from the QTI bearish yellow curve. Unfortunately, this bullish behavior remains configured as a mere bullish spurt.

Jun 14, 2010-Mon-None.

Current Strategy-Short-term Indicant- Jun 18, 2010-Same. Jun 17, 2010-Same. Jun 16, 2010-Wed-Same. Jun 15, 2010-Tue-Do not believe recent bullishness. Too many short-term attributes are not shifting in support of bullish sustainability. Jun 14, 2010-Mon-The expected choppiness has occurred, but configuring for additional bearishness.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.

Other links:

Short-term Indicant for DJIA and NASDAQ

Short-term Indicant Tables for the Dow Jones Industrial Average Index

Short-term Indicant Table for the NASDAQ Composite Index

Indicant Volume Indicator

Near-term, Quick-term, and Short-term Indicant for Major Indices

Divergence versus Convergence

The stock market enjoyed bullish convergence the past two weeks. However, a combined bearish convergence/divergence in four of the past eight weeks remains as a dominant theme. Periodic bullish spurts have dampened bearish enthusiasm, but not escaping it entirely.

Bearish convergence was endured for four consecutive weeks ending 19-weeks ago. Bearish convergence of four consecutive weeks is strategically bearish. It, however, has not upset the Mid-term Indicant bullish attributes. Its threat has diminished by virtue of recent successes at bullish convergence/divergence, but lingers since short-term attributes are having difficulty escaping a converging configuration. Recent bearishness, in essence, is placing the market at about the same point it was at the conclusion of those four consecutive weeks of bearish convergence from last February. In effect, the markets are saying, the March-April bullish behavior was a mere bullish spurt.

Indicant Conclusion

Conclusions remain relatively static for the past several weeks. However, there are a few adjustments.

As stated the past thirty-six weeks, low interest rates are imposing narrowed alternative investment opportunities. The expiration of the Near-term Bull again suggests this is an increasingly irrelevant observation, relative to more worldly dynamics.

The capital markets crushed the early February threat by the stock market bear with a strong bullish spurt in March and April. Unfortunately, bearish behavior in four of the last seven weeks offset the March-April bullish surge. That suggests the early February bearish threat had more merit than the Mar-Apr bullish surge.

Fundamental economic data continues improving, but the bear is apparently being stimulated by more broad economic fundamentals. The bear’s delight is sourced primarily from Europe.

Politicians continue adding bearish punch. Cap and trade legislation, based on mystical global warming, is bearish as it sucks money from capitalists and places it in the hands of politicians and government bureaucrats, inviting greater inefficiencies in its use. A recent resurrection of drilling moratoriums should inspire the bear for yet more drama. Much of this favors inflation, but the jury is still out on that.

Short-term attributes remain a concern. As stated the past five weeks, the problem of Vector Pressure remaining in a near-converging pattern for several weeks offered a technical avenue for the bear’s encouragement. Collapsing NTI Blue Curves and declining Vector Pressure are adding to the stock market bear’s arousal.

Short-term pressure is now residing in bearish domains. That provides bearish confidence on a short-term basis.

However, overall corporate earnings are expected to continue improving, which is the ultimate fundamental element. Austere measures by all governments, along with a reduction in civil strife, should inspire the bull once bearish momentum subsides. As of five weeks ago, though, the Short-term Indicant is suggesting an increased bearish bias. Do not be surprised at a reduction in projected earnings in the next few quarters.

Keep up with the daily stock market report as the Quick-term and Near-term attributes can shift quickly.

Do not get lazy and set those stop losses for those stocks and funds that continue to enjoy hold signals.

The daily updates are on the following link.

http://www.indicant.net/Non-Members/Back%20Issues/QT.htm

Hyperlinks

To access all major markets, stocks, funds, economic data, charts, statuses, etc, click the following hyperlink:

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Summary.htm

Once you are inside the website, click on "members update" or simply log in. It is on the top of every page in the web site so you can always find your way back.

Happy Investing,

www.indicant.net

06/20/2010

Jun 13, 2010 Indicant Weekly Stock Market Report

The Inferior Thinking of a Politician

The link to the source of this commentary can be found by clicking this sentence.

“The solution to a problem cannot be qualitatively more elegant than the problem itself. Really messy problems do not have clean solutions. There is a tendency for people to critique the solution while forgetting what the problem is.” – Barney Frank.

Indicant counter-point: The term, problem, implies a singular issue. The institution in which Barney Franks represents creates many intertwining problems. The U.S. Congress and all prior politicians have created a multitude of economic problems. The Congressional Effect Fund highlights this. When the U.S. Congress is in session, the stock market does not go up.

So here is a problem for Barney Frank. Problem: When you and your colleagues are working, economic wealth stagnates. Solution: Quit working so much. How about working only during international conflict and challenging the executive branch’s treatment of it. Nothing else needs any work, except for eliminating over two-thirds to three quarters of the federal government’s bureaucracy and setting the top tax rate at 10% for all Americans on a single sheet income tax form.

For those who have solved problems, the solution is always more elegant than the problem itself. Very few problems are elegant, but the solution is always elegant. One can suppose Barney Franks has never solved any problem since he does not understand the ecstasy of its elegant solution. Oh well, politicians tend to place slop on top of slop and thus the lack of elegance in their output.

Another quote from Barney Frank: “And one of the important tools economists employ--which we in public policy can employ intellectually but we can’t use politically--is called the counter factual. A counter factual is what economists do when they are analyzing a proposed solution or a proposed action and they think about what would be the result if you took the opposite situation. What is the counter factual, if you did this—that is the factual. What would it be if you did that?”

Continuing with the Barney Frank quote, “Now that will often make the solution look less worse than otherwise. But it is a hard one to deal with. It is certainly hard for politician, very often the result of the counter factual is to show that while things are unsatisfactory in this case—they would be much worse in that case. The politician who goes before the voters and says, “listen you should be very glad I did this. Because as a result of what I did things are awful, but boy would they have been worse if I didn’t do it.”

Indicant counter-point: The counter factual is not provable. It is theory and most often biased, depending on who is paying whom. The term, counter-factual, is bogus and meant to influence the ignorant. Facts are never forecasted. A fact can only exist in the past and present. It is amazing how politicians create succinct lies to go along with their longer worded ones.

Now, go back and read the first paragraph. Notice Barney Franks use of the term, qualitative.

Any conclusion based solely on qualitative assessment is a lazy one. Qualitative assessments are mere opinions. Opinions, encased in a three-pound brain, reflect the narrowed content of that brain. Such output is subjective and thus valueless. That contrasts with valuable output, such as horsepower from Tesla’s electric motors and generators. Tesla’s output is quantitative and thus its merit is inarguable.

Qualitative views are always argued, while quantified results are inarguable. Entire industries have been created because of the increasing craziness of qualitative viewpoints, such as talk radio, Fox News, MSNBC. The so-called left and right argue incessantly about the other’s qualitative views. It is a growth industry and one that does not add economic wealth. Millions listen with their three-pound brains to others who express content with their three-pound brains; all with absolute zero proof of the integrity of their claims until quantified and evolved to fact.

Barney Frank adds what is increasingly popular for political mumbo-jumbo. “Because of a result of what I did, things are awful, but boy would they have been worse if I didn’t do it.”

The above statement implies forecasting. Politicians quite often say the recession would have been worse if I had not taken the action I took. So, Barney Frank is right in line of a popular contemporary political theme. It is scary that over 50% of the voting public may believe it.

One common attribute in forecasting is its error. All have error. A quantified forecast has an error that can be measured. It is the difference between what was forecasted and what actually happened. There is always a difference, as perfect forecasts seldom occur.

A qualitative forecast also has error, but without measurement. It is impossible to gauge the integrity of a qualitative forecast. A qualitative forecast is mumbo-jumbo; a convenient conclusion for the political minded, where real talent is lacking. A quantified forecast is more difficult to produce. A qualitative forecast is a blend of saliva, tongue, and larynx making noise or about the same as a burp with an additive element of gas. Quantifying forecasts requires some real work. Once announced, its accuracy can be assessed with honest objectivity; a concept the politically minded find objectionable.

So, the next time your political representative suggests the recession would have been worse if he or she did not take the action they took, engage in a dialog similar to what follows:

First, you will want to point out your admiration for the politician’s bold claim. You will look them in the eye and thank them for their corrective actions that minimized “horrible.” Since they are so smart and benevolent, you are very grateful for their wisdom and high skills that shape your happiness.

After your introductory compliments and expressed state of worship, the latter of which is very important to the politician, state the following:

Since you know that things would have been worse if you had not taken the action you took, you most certainly must know what the future holds. Given these facts, as you have conveyed to me, what will the Net National Product be next year. What will consumer spending be between this coming Thanksgiving and Christmas? What will S&P500 earnings be next year and in each of the five subsequent years. Exactly, what will be the growth in productivity be in those same five years? What is the government’s current productivity? Will Chinese or Indian stocks outperform the S&P500 over the next five years? Where will be Dow be next quarter, next month, next year, and five years from now?

Since the politicians have this profound wisdom claiming, “things would have been worse without their actions, they certainly must have an ability to provide “quantified” answers to the above questions. If they stammer and do not answer the questions or offer “qualitative insight” then it is appropriate to challenge their original assertion. That is, “things may have been better if you had done nothing.” History suggests the latter is true and their original assertion is bogus, but the political minded will continue boastful arguments even in the face of contradicting facts.

There is one inarguable fact. Politicians offer zero positive impact to the economy. On the contrary, politicians negatively affect the economy. The only thing politicians can do favorably to the economy is to undo their prior damage. Not too many are interested in doing the latter since it reduces their importance. Therein lays the problem of national debt.

Each generation of politicians searches for those large crowds who will clap and cheer at every utterance from their three-pound brains. To accomplish this, one must promise to give. And give they do. The problem is in the taking so they can do their giving. The only known cure is a complete collapse of the society they oversee. That would be bearish!

It will be interesting to see how many incumbent politicians will be booted from office this November. A high turnover would be bullish; low turnover would be bearish; very bearish.

Keep your eye on the daily stock market report.

Weekly Buy/Sell Summary – Stocks and Funds – Mid-term Indicant

Click this sentence for a graphical summary of what follows. Simply scroll down the page to see graphical and detail content of this section.

The Mid-term Indicant generated no buy signal and no sell signals.

The Mid-term Indicant is signaling hold for 192 of the 333-stocks and funds tracked by the Indicant. The stocks and funds with hold signals are up an average of 30.8%. That annualizes to 31.4%. The Mid-term Indicant has been signaling hold for these 192-stocks and funds for an average of 51.0-weeks.

The Mid-term Indicant is avoiding 124-stocks and funds of 333- tracked by the Indicant. The avoided stocks and funds are down an average of 31.1% since the Mid-term Indicant signaled sell an average of 72.3-weeks ago.

One year ago, on Jun 12, 2009, the Mid-term Indicant was holding only 22-stocks and funds out of 344 tracked for an average of 100.2-weeks. They were up by an average of 122.9% (annualized at 63.8%). There were 322-avoided stocks and funds at that time. The avoided stocks and funds were down an average of 24.7% since their respective sell signals an average of 53.0-weeks earlier one year ago.

The Mid-term Indicant was signaling hold for 181-stocks and funds of the 345-tracked two years ago on Jun 13, 2008. They were up by an average of 161.3% (annualized at 61.5%) since their respective buy signals an average of 136.3-weeks earlier. The Mid-term Indicant was avoiding 141-stocks and funds at that time. They were down an average of 18.4% since their respective sell signals an average of 32.2-weeks earlier.

There were 312-stocks and funds with hold signals on Jun 8, 2007 since their buy signals an average of 104.6-weeks earlier. They were up by an average of 127.1% (annualized at 63.2%). There were 27-avoided stocks and funds at that time. They were down by an average of 14.8% from their respective sell signals an average of 28.3-weeks earlier.

On Jun 9, 2006, the Mid-term Indicant was signaling hold for 221-stocks and funds out of 345-tracked. They were up by an average of 141.9% (annualized at 67.8%) since their buy signals an average of 108.9-weeks earlier. The Mid-term Indicant was avoiding 112-stocks and funds at that time. They were down by an average of 6.6% since their sell signals an average of 14.8-weeks earlier.

Five years ago, on Jun 10, 2005, there were 207-hold signals for stocks and funds out of the 320 tracked by the Mid-term Indicant at that time. They were up an average of 100.0% (annualized at 57.5%) since their respective buy signals an average of 90.5-weeks earlier. There were 112-avoided stocks and funds then. They were down an average of 26.4% since their respective sell signals an average of 58.7-weeks earlier.

On Jun 11, 2004, there were 242-stocks and funds with hold signals from the listing of 296-tracked by the Mid-term Indicant at that time. They were up an average of 72.0%, annualizing at 70.6%, since their respective buy signals an average of 53.0-weeks earlier. There were 40-avoided stocks and funds then. They were down by an average of 14.6% since their sell signals an average of 20.2-weeks earlier.

There were 289-stocks and funds with hold signals on Jun 13, 2003. They were up by an average of 44.6%, annualizing at 116.3%, since their buy signals 20.0-weeks earlier. The two avoided stocks and funds were down an average of 26.1% since their respective sell signals an average of 26.6-weeks earlier.

On June 14, 2002, there were 93-stocks and funds with a hold signal, enjoying a 34.7% gain since their respective buy signals an average of 36.4-weeks earlier. That annualized at 49.5%. There were 188-avoided stocks at that time. They were down 22.3% since their sell signals an average of 9.2-weeks earlier.

Summary of Stocks and Funds with Buy and Sell Signals This past Week

To maintain appropriate security, you can see the Mid-term Indicant "buy/sell" signals for stocks and funds for this week by clicking the following link. It is in the member’s only section.

Click this link to this week’s buy and sell signals.

http://www.indicant.net/Members/Updates/All%20Update%20Forms/UD%20Summary.htm

Comments about Mid-term Indicant Buy and Sell Signals This Weekend

The Long-term and Mid-term attributes have not yet succumbed to the stock market bear’s ambition, but with an increasing probability to do so.

The Dow Utilities shifted in favor of the bear on a Mid-term basis in early Feb 2010. The S&P100 Index received a Mid-term Bear signal on Jun 4, 2010.

Sell signals this past weekend is being delayed due the probability of a bullish spurt this coming week. Configurations suggest a bullish spurt is highly probable, but nothing suggests sustainable bullishness.

Click the following link that will take you to the Near-term, Quick-term, and Short-term Indicant models.

http://www.indicant.net/Members/Updates/STI-Mkts/STI-10-Indices/STI08.htm

Stop Loss Management

Long after a successful buy, monitor prices relative to the bearish yellow curve. That will minimize the number of trades, while protecting portfolio values.

The Indicant Stock Market Report’s Secular Market Blend

The Dow is up 40.1% since its secular weekly low on October 9, 2002. The NASDAQ is up 101.4% and the S&P500 is up 40.5% since then. The small cap index, S&P600, is up 103.2% since October 9, 2002. All of the major indices were at new lows on the same week in 2002, which is a common attribute for bottoming.

The NASDAQ is down 55.6% since its last weekly secular peak on March 9, 2000. The S&P500 is down 28.5% since its similar secular peak on March 23, 2000. The Dow is down by 12.9% since January 13, 2000 when it peaked from the 1990’s roaring bull. As stated the past several years in this report, do not be surprised at the NASDAQ equaling its March 9, 2000 high until after 2025.

The NASDAQ year-to-date performance was bearish by 12.1% through this week in 2001. The NASDAQ finished 2001 down by 21.1%, which was congruent with standards of post-election-year-bearishness.

The NASDAQ was down by 23.2% through this weekend in 2002. Some of you recall the dynamic bear market in 2002, where the NASDAQ finished that year down by 31.5%. The bear cycle found bottom in October 2002, which was consistent with the mid-term year’s historical standards of finding bottoms in mid-term election years.

The NASDAQ YTD 2003 performance was up by 23.3%. It finished up in that solidly bullish year by 50.0%, which was consistent with historical pre-election year results. It was down on this weekend in 2004 by 0.2% and finished up by 8.6% for that year, which was congruent with election year bullishness, although shy of magnitude standards.

It was down 5.2% in 2005’s post election year, which was consistent with historical standards of losses and/or minimal gains. Many of you recall that 2004 and 2005 were meandering bear markets. The post election year of 2005 finished up by a mere 1.4%, which was an excellent year, based on post election year historical standards of bearishness.

In 2006, the NASDAQ was down 3.2% on this weekend and finished that year with a 9.5%-gain, which again maintained congruency of historical bullishness for a mid-term election year. It was up by 6.5% at this time in 2007 and finished that year in positive territory by 9.8%, which was consistent with pre-election year bullishness.

The NASDAQ was down by 9.7% on this weekend in 2008. It finished down by 40.5% in 2008. That was extreme contrarian performance to the standards of historical election year bullishness. It was the most bearish presidential election year since related records from 1832.

The NASDAQ was up 18.1% at this time last year. It finished 2009 up by 43.9% in extreme contrarian performance to historical standards. Keep in mind, this extraordinary bullish cycle in 2009 finished that year down by 20.6% from its prior Mid-term cyclical peak on October 31, 2007. Historians will view that extraordinary bullishness as a mere spurt (reverberation) from 2008’s severe bear market. The 2008 bear market more accurately reflected economic fundamentals than the 2009 bull market. Much of the 2009 bull market correlated well with declining political popularity.

The Dow was down 0.1% on this weekend last year but finished 2009 up by 18.1%. Although post election years are generally bearish, the Dow’s gain for 2009 was slightly below the average gain during years with post-election-year bullishness.

The Dow is down 27.9% since its last weekly closing peak on Oct 9, 2007. The NASDAQ is down 21.5% since its last peak on Oct 31, 2007. The S&P600-small cap index is down 22.1% since its last closing peak on Jul 19, 2007. Bull market expirations are not as obviating with simultaneous peaking like bear markets are with simultaneous bottoming among the major indices.

The Dow is up 56.0% since March 9, 2009. The NASDAQ is up 76.9% and the S&P500 is up 61.4% since then. The S&P600, Small Cap Index, is up 90.8% since March 9, 2009. That March 2009-January 2010 bull leg was indeed powerful, but such cycles have occurred many times in the past only to be followed by bear cycles of varying breadth and depth. The Mid-term Indicant does not suggest impending bearishness, which is supported by the Short-term Indicant. Until the past six weeks, Near-term attributes were bullishly supportive, but continuing with bearish favorability.

Keep your eye on the daily stock market report.

Economic Conditions – Inflation, Currency, Interest Rates

Click the above heading for a summary of hard economic indicators.

Most of the hard economic data such as, interest rates, commodities, and currency exchange rates continue holding relatively constant. The discount rate is no longer a yellow bear. It is attempting a “technical U-turn” from the depths of its prior fall. It is now a Red Bull, albeit a depressed one. The sinusoidal waves suggests interest rates are anxious to start rising again. They are doing so in China. Keep in mind, though, that interest rate depths remain as a non-threatening configuration to the stock market bull. The discount rate’s U-turn is to be monitored. A person with a three-pound brain sets it and one never knows when cerebral dysfunction can occur. It can occur at any moment and to make matters worse, such dysfunctional twists are not predictable.

Most of the content in this section remains the same. Until conditions change, verbiage will change very little. The idea here is not entertainment, but retention of facts in spite of boring repeatability. At some future point they will change and influence drama. Monitoring them regularly is important to anticipate those magical moments.

As stated for several months, rising interest rates would normally threaten the stock market bull. However, they are so low, a prognosis of normalcy borders minutia. In essence, potential rate hikes are irrelevant to the stock market at these levels.

The Fed’s current strategy is to maintain low rates, conflicting with the normalcy of rate hikes during economic recovery. This, coupled with excessive government spending, is a recipe for hyperinflation and/or high interest rates at some future point. That will eventually lead to a stock market bear and high commodity prices, including gold. Keep in mind that the combination of high interest rates and inflation or deflation exceeding an absolute value of 8% has a history of being extremely bearish for both the stock market and the economy. Currently, that is not a threat when considering the United States as a single parameter. The world economy, on the other hand, is shaping a new dynamic.

Some prognosticate a future with deflation. The combination of prevailing interest rates and the absolute value of inflation/deflation exceeding eight percent produce very aggressive and deep stock market bears. At least that is the history. It does not matter which projection is accurate with respect to the stock market. Inflation or deflation exceeding the limits of tolerance will induce a stock market bear.

Some short-term rates have been nudging north the past few weeks. All major cycles, regardless of subject, begin with subtle movements in their favorable or unfavorable future paths. Sometimes there is nothing to it, but sometimes it is that point where one’s hindsight indicates the optimum point in time where one would have enjoyed taking profit-concluding action.

As stated 89-weeks ago, once the euphoria of the socialistic methods begin displaying its harsh reality on the reduced quality of life, rest assured the bear market will continue and with gusto. This is not technical. This is fundamental. You will see that prognosis continuing in spite of the March 2009-January 2010 Bull Leg. That bullish spurt from late Feb through early May turned out to be a fake.

The question remains, is public resistance to healthcare reform and other socialistic endeavors really from the grassroots? If so, and if its political influence results in cessation of the rampant stupidity in Washington D.C., the bull will find that too favorable to acquiesce to the bear on the immediate horizon. Although healthcare reform garnished most of the attention in 2009, cap and trade legislation will depress corporate profits, depress capitalistic adventurism, and thus will eventually depress the stock market. European economic failures threaten the bull as well.

This is getting trickier since nearly one-half of the U.S. population does not pay federal income tax. Coupling that to union voters and government employees, who pay federal income tax, suggests over 50% is permanently in favor of socialism. That does not bode well for the capital markets. A new group of economic leeches is evolving; hundreds of thousands are not making their mortgage payments. They are using mortgage money to buy flat panel televisions and I-Pods, I-Pads, and whatnot. The population of economic leeches is over 50%. Their lack of discipline, though, keeps a fraction of them away from the voting booths. For those of you who have a sense of reality should hope that fractional amount reduces their voting powers to less than 50% of the populace.

As stated the past 41-weeks, on a positive note, it appears enough of the populace are influencing their political representatives to slow the progress of stupidity in spite of recent escapades by the stock market bear. If this happens, then bearish expectations of great magnitude will be muted. A measure of American voter stupidity will conclude in November 2010. The stock market may anticipate reduced stupidity and with that, the current bull market could continue through 2012, but recent political/leeching events suggest that is now unlikely. Regardless of long-term prognosis, there is nothing wrong in participating in the various bull legs, such as the one from March 2009 through May 2010.

Fear Metrics: Economics and Terrorism

Vanguard Gold and Precious Metals (VGPMX) - #19 was up 162.2% from its April 13, 2001 buy signal until the Mid-term Indicant sell signal on October 3, 2008. The Mid-term Indicant signaled buy on Oct 16, 2009. It is down 2.1% since then. It has been bearish in nine out of the last 21-weeks, but solidly bullish in eight of the last 15-weeks. It was solidly bullish last week.

Fidelity Gold, Fund #28 received a buy signal on Sep 4, 2009. It is up 11.2% since then, annualizing at 14.5%. It was also bullish last week.

Vanguard Energy #18, VGENX, was up 144.9% from since the Mid-term Indicant buy signal April 5, 2003 until its sell signal on October 3, 2008. It is up 3.8%, annualizing at 4.3% since its buy signal on July 31, 2009.

State Street Research Global #9, SSGRX, was up 174.2% from its August 16, 2002 buy signal to the Mid-term Indicant sell on October 3, 2008. It was down 18.4% since that sell signal and the buy signal on January 8, 2010. The Mid-term Indicant signaled sell for this fund on Feb 12, 2010. It is down 5.3% since that sell signal. Although energy is an excellent long-term investment, cap and trade political threats and moratoriums on drilling in the U.S., coupled with the strengthening U.S. dollar may wreak more damage to this fund than previously computed. It was solidly bullish this past week.

The Quick-term Indicant signaled, sell, for ETF#03 – Energy and Natural Resources on May 20, 2010. It is up 4.1% since then. It is undergoing a mere bullish spurt at this time. It was up 242.4% (annualized at 44.8%) since the buy signal on March 26, 2003 until the September 2008 sell signal. It was mildly bearish between the Sep 2009 buy signal and the May 20, 2010 sell signal. The Near-term Indicant signaled sell for this ETF on May 7, 2010. It is down 1.2% since then.

The Quick-term Indicant signaled buy for the GLD-ETF#11 on December 11, 2008. It is up 48.8% since that buy signal, annualizing at 32.1%. It gained 81.4% from its August 3, 2005 buy signal until the September 8, 2008 sell signal. Its annualized gain during that hold period amounted to 27.1%. The Near-term Indicant signaled buy on April 24, 2009 and it gained 17.3% until its sell signal on Feb 4, 2010. It received a buy signal again from the Near-term Indicant on Mar 2, 2010. It is up 8.1% since that buy signal, annualizing at 28.9%.

Most commodities were bullish last week while the energy services sector was also bullish. It will be interesting to see how the moratorium on drilling in the U.S. will play out. Fundamentally, it should be bearish for the energy services sector, while the oil companies should do well since oil prices should move to the north. They will enjoy more profits with less expense. They will drill around the world and most likely depart from U.S. political threats.

Mid-term Indicant Positions – Ten U.S. Indices

There were no new bull signals and no new bear signals.

The Mid-term Indicant signaled bull on July 31, 2009 for all ten major indices. The Mid-term Indicant signaled bear on Feb 12, 2010 for the Dow Utilities. It is up 0.9% since that bear signal. The S&P100 endured a Mid-term Bear signal on Jun 4, 2010. It is up 2.0% since the Jun 4 bear signal, reflecting a bullish spurt.

The eight remaining major indices retaining bull signals are up by an average of 15.1% since there respective bull signals an average of 45.0-weeks ago. That annualizes at 17.5%.

Other than the Dow Utilities and the S&P100, the remaining major indices remain with bullish attributes. The Dow Utilities has been pitifully bullish in this cycle, but it may receive a bull signal once pressure escapes convergence. That possibility diminished the past six weeks with solid stock market bearishness in four of those six weeks. Last week enjoyed a bullish rebound, but the configurations suggest that is a mere bullish spurt (sucker rally).

The Mid-term Indicant Dow Jones Industrial Average performance is at $29,327,217. That beats buy and hold performance of $1,553,487 on a $10,000 investment in the Dow stocks in 1900. The MTI S&P500 is at $142,001. That beats buy and hold’s $106,925 on a December 31, 1971 $10,000 investment. The MTI-NASDAQ is at $204,456. That beats buy and hold’s $77,795 on an October 18, 1985 $10,000 investment. The Mid-term Indicant model beats buy and hold by 1787.8%, 32.8%, and 162.8%, respectively, for these indices as of this past week.

Click here for a tour of the Mid-term Indicant for major market indices.

Mid-term Indicant Positions - NASDAQ100 Stocks

Click here to see NASDAQ100 report card history.

Click here for Mid-term Indicant Table of NASDAQ 100 Stocks.

Mid-term Indicant Positions - Dow Jones 30 Industrial Stocks

Click here to see Dow 30 report card history.

Click here for Mid-term Indicant - Table of Dow Jones Industrial Average Stocks.

Mid-term Indicant Positions - Dow Jones 15 Utility Stocks

Click here to see Dow Utilities Report Card history.

Click here for Mid-term Indicant - Dow Jones Utility Stocks Table.

Mid-term Indicant Positions - Indicant Selected Stocks

Click here to see Indicant Select Stock Report Card history.

Click here for Mid-term Indicant Table of Indicant Selected Stocks.

Mid-term Indicant Positions - Mutual Funds

Click here to see Mutual Fund Report Card history.

The Mid-term Indicant signaled sell for ProFunds Ultra Short on April 3, 2009. It is down 58.0% since then. It will receive a buy signal only if the Quick-term Indicant signals buy for QID. Although this is classically a post-election-year hold, the Mid-term Indicant was unable to signal buy in 2009. The Short-term Bull displayed attributes of a thoroughbred in 2009 and thus no opportunities were available to shorting the stock market since the April 3, 2009 sell signal.

Click here for Mid-term Indicant Table of Mutual Funds

Remember never to keep more than 20% of your investment resources into a single mutual fund. Sector investing in mutual funds is an extremely good way to mix your investments.

Long Term Indicant Positions - Dow Jones Industrial Average

The blue-chip Long-term Indicant Bull signal was at 2895 for the DJIA in November 1991. Keep in mind the Long-term Indicant generated only five bull/bear cycles since 1920.

The Dow is up 252.8% (annualized at 13.5%) since the Long-term Indicant signaled bull 971-weeks ago. Economic data is the primary influence on the Long-term Indicant. Recessions, deflation, inflation, and unreasonable interest rates have not been strong enough to signal bear since that bull signal, including relative performance since that bull signal. Even with today’s economy and stock market position, the 1991 investor is still up triple digit amounts, which remains above average performance when considering long-term planning.

Influencing parameters in the LTI include prior bull cycles. The great bull market in the 1990’s was powerful enough to offset the 2008-2009 recessionary bear market in this long-term modeling.

The Short-term Indicant Stock Market Report

Short-term Indicant Stock Market Report - Summary

As stated the past few days, the only remaining short-term attribute offering potential resistance to the stock market bear is the Quick-term Bearish Yellow Curve. Unfortunately, this resistance has been pathetic until this past Thursday and Friday. Six more yellow bears were born last Monday. That is bearish. Continue considering bullish behavior as mere bullish spurts in the face of a dominant short-term bear.

Near-term, Quick-term, Short-term Indicant Stock Market Details

The Near-term Indicant signaled no new bulls and no new bears.

The VIX is the lone NTI bull. It is up 24.9% since the bull signal 6.4-weeks ago. That annualizes at 201.4% due to its relative newness and profound bullish behavior the past several weeks.

The Near-term Indicant is signaling bear for the remaining eleven indices. They are down by an average of 2.4% since their bear signals an average of 5.0-weeks ago.

The Quick-term Indicant signaled no new bulls and no new bears. QTI bear signals this past May were the first since July 2009.

The Quick-term Indicant is signaling bull for six major indices. They are up by an average of 32.6%, annualizing at 33.5%, since their bull signals an average of 50.6-weeks ago.

The Quick-term Indicant is signaling bear for six indices. They are up by an average of 2.4% since their bear signals an average of 4.4-weeks ago.

-Short-term Trend Sensitive Attributes (Includes Near-term and Quick-term)

Quick-term Attributes (This is a longer cycle than Near-term cycles)

QTI-Red Bull Count; No non-contrarians; no bullish support.

QTI-Bullish Red Curve Trend; Five non-contrarians moving bullishly; weakening bullish support.

QTI-Yellow Bear Count; Five of the non-contrarians are inflicted with this bearish attribute. This has increased the probability of extending the bear’s breadth and magnitude. Keep in mind this can also reinvigorate the bull, but this remains a much lower probability.

QTI-Bearish Yellow Curve Trend; Non-bearish majority with five of 11-non-contrarian indices in non-bearish trend, supporting non-bearish bias along this slower cycle. However, even this strong resistance point is losing its capacity to do so.

The Quick-term Indicant is no longer supportive of the QTI Bull due recent bear signals. Keep in mind, not all of the major indices have fallen below their respective QTI bearish yellow curves. Although some expected resistance occurred the past several days, it was pathetic. Initially, that encouraged the bear, but some resistive potential remains.

Near-term Attributes (This is a shorter cycle than the Quick-term cycles)

NTI-Blue Bull Count; nine non-contrarians; no near-term bullish support, as this reflects recent spurt behavior.

NTI-Bullish Blue Curve Trend; All non-contrarians sloping negatively; no bullish support.

NTI-Bearish Green Curve Trend; All non-contrarians sloping negatively; no non-bearish support.

The Near-term attributes continue inflecting with an increasing bias, favoring the bear. Both NTI Bullish Blue and NTI Bearish Green are sloping south and thus solidly bearish on a near-term basis.

Short-term Force Vectors and Pressure Attributes

STI-Force Vector Domain Position; None of the non-contrarians are in bullish domains offering no bullish support.

STI-Force Vector Position Relative to Vector Pressure; Three of the non-contrarians are above Pressure but not offering bullish support. Just reflecting bullish spurt behavior.

STI-Force Vector Direction; Ten of the non-contrarians are moving north. However, there is no bullish potential manifesting. As stated the past few days, they are ominously configured in support of additional bearish behavior.

STI-Vector Pressure Trend; None of the non-contrarian indices are moving bullishly; no bullish support.

STI-Vector Pressure Position; Zero non-contrarians are in bullish domains; no bullish support.

Short-term Market Summary

-Tangential Protection – None!

-Political Climate – Favorable to bear!

Click this sentence to the table, highlighting RTP’s (Reverse Tangential Projections). The values and magnitudes are expressed in the table on the website. Keep in mind there is 100% confidence in these bearish projections. The problem is not knowing when, but odds favor before the first half of this year (2010). Much of this depends on political influences. There will be some unfavorable influences. There always is. The question is, when?

The tour is still being developed, but most of you are now familiar with the Near-term bull/bear cycles as well as the tangential protections and reverse tangential bearish detectors.

Indicant Volume Indicators

Volume indicators are becoming lethargic, as the previous robust cycle has expired. Some of this recent lethargy is traced to seasonal behavior. The expiring robustness configured during solid bearish expressions during May and early June. Therefore, volume relationships are biased in favor of the bear. (Recent chronological observations are expressed below in reverse order).

Jun 11, 2010-Very low volume on mild bullishness continues in support of bearish bias on a short-term basis.

Jun 10, 2010-Flat volume on bullish aggression suggest more emotion than substance. Bearish bias remains in tact.

Jun 9, 2010-Volume relationships remains with bearish bias.

Jun 8, 2010-Tue-Healthy volume on mixed market behavior continues in support of status quo and thus remains with bearish bias.

Jun 7, 2010-Mon-Again, volume behavior and the IVI remain supportive of the bear.

Jun 4, 2010-Fri-Volume was more aggressive on today’s bearish aggression, fulfilling the bear’s ambition and current bias.

Short-term ETF Report Card, Status, and Charts

The Near-term Indicant generated no buy signals and no sell signals.

The Near-term Indicant is signaling hold for three ETF’s. They are up by an average of 7.7%, annualizing at 47.8%, since their buy signals an average of 8.3-weeks ago.

The NTI is avoiding 28-ETF’s. They are down an average of 1.4% since their sell signals an average of 3.8-weeks ago.

The Quick-term Indicant generated no buy signals and no sell signals.

The Quick-term Indicant is signaling hold for 13-ETF’s. They are up an average of 33.1% since their buy signals an average of 52.7-weeks ago. Those with hold signals are annualizing at 32.6%.

The Quick-term Indicant is avoiding 18-ETF’s. They are down by an average of 0.7% since their sell signals an average of 5.7-weeks ago. These avoided ETF’s include contrarian QID, which is down 60.6% since its QTI sell signal over a year ago on Mar 26, 2009.

Near-term Indicant ETF Key Attributes

NTI Blue Bull Count; nineteen non-contrarians; no bullish support, as bullishness the past two days is just a spurt.

NTI Blue Curve Trend: none of non-contrarians are sloping north; offering no bullish support.

NTI Green Bear Potential Count; all non-contrarians; there is no near-term non-bearish support.

NTI Green Curve Trend; none of the non-contrarians are sloping north; no non-bearish support.

Quick-term Indicant ETF Key Attributes

QTI Red Bull Count; no non-contrarians; no bullish support.

QTI Bullish Red Curve Trend; None of the non-contrarians are sloping north. There is reducing support for Quick-term Bull, but the population of this bullish attribute continues to decline.

QTI Non-yellow Bear Count; five non-contrarians with increasing bearish support.

The Short-term Indicant ETF Key Attributes:

STI Force Vector Direction; zero non-contrarians moving bullishly. As stated last May 26, do not be surprised at a mild bullish spurt, followed by more bearish aggression in the next five to ten days. You saw that two weeks ago. Another bullish spurt is underway. Do not be surprised at more bearishness in the next few weeks. This spurt may have some sustainability of days/weeks and not months. The bear remains dominant.

STI Force Vector Position; twelve non-contrarians are populating bullish domains, but temporarily so.

Vector Pressure Position; None of non-contrarians are in bullish domains; no bullish support and increasing bearish support. This attribute is a focal point since Pressure remains near zero and has for several weeks. The last bullish cycle did not escape Feb 2010 bearish convergence. This attribute is rapidly deteriorating. That is increasing threats to the remaining Near-term hold signals.

Vector Pressure Trend; only five of the non-contrarians are moving north; there is very limited bullish support and increasing bearish support.

Short-term Summary: Most attributes are supporting the Short-term Bear.

Contrarian Funds

ETF#03-Natural Resources. The Near-term Indicant signaled sell on May 7, 2010. It is down 1.2% since that sell signal. The Quick-term Indicant signaled sell on May 20, 2010, as its price fell below QTI Bearish yellow curve. It is up 4.1% since the QTI sell signal. Pressure remains in bearish domains and thus non-threatening to its bearish attributes.

ETF#11-Gold and Precious Metals is up 48.8% since the QTI signaled buy on December 11, 2008. Annualized growth is at 32.1%. Bearish yellow is a good price to set stop losses for a longer-term hold position, which is at $104.87 and still rising.

The Near-term Indicant signaled buy on Mar 2, 2010. It is up 8.1% since that buy signal, annualizing at 28.9%.

Click this sentence for additional charting and current forecasting of the actual price of gold.

ETF#14-TLT-Long Government received a buy signal from both the Near-term and Quick-term Indicant models on Apr 27, 2010. It is up 6.9% since those buy signals, annualizing at 54.9%. This ETF is increasing its bullish attributes. It is usually contrarian to the overall stock market, which adds to an increased overall stock market bearishness prognosis.

The Near-term Indicant signaled buy for ETF#31-QID on Thursday, May 13, 2010. It is up 8.0% since then, annualizing at 99.6%.

The Quick-term Indicant signaled sell for QID on March 26, 2009. It is down 60.6% since then. The Quick-term Indicant will not signal buy until it contacts the bearish yellow curve, which is valued at $20.43 and still falling. Its rate of decline is slowing.

Major ETF Events

Jun 11, 2010-Fri-Contrarian ETF’s were not contrarian. They were up on a mild bullish day, suggesting trader confusion. Nothing changed and bearish bias remains.

Jun 10, 2010-Thu-Today’s bullish aggression is technical. It was just a mere bullish spurt in the face of a stock market bear.

Jun 9, 2010-Wed-The stock market was bullish on an intraday basis due to political commentary by the Fed Chief, but once the talking stopped, reality exerted itself and concluded with bearishness in late day trading.

Jun 8, 2010-Tue-None.

Jun 7, 2010-Mon–ETF#27-XLP-Consumer Staples endured its first sell signals from both the Near-term and Quick-term Indicant models since buy signals over a year ago.

Current Strategy-Short-term Indicant- Jun 11, 2010-Fri-Same. Jun 10, 2010-Thu-Same as the past few days. Jun 9, 2010-Same as the past few days. Jun 8, 2010-Tue-Consider bullish expressions as mere spurts in the face of a dominant bear. There could be some choppiness over the next few weeks. Jun 7, 2010-Mon-Bear remains dominant.

Click Quick-term Indicant, Near-term, and Short-term for all 31-ETF’s.